Remembering Kenneth Arrow

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Perhaps in this new era of politics, where the arbitrary and the confused abound, Arrow and his wisdom are needed more than ever. Too bad he won’t be here to share it in person.

On Tuesday, February 21, renowned economist and Nobel laureate Kenneth Arrow died at his home in Palo Alto. He was 95.

Kenneth Arrow won the Nobel Memorial Prize in Economics along with fellow economist John Hicks in 1972 for his foundational work in the theory of public choice, the economics of the collective.

Arrow was a pioneer in transforming problems in economics and politics into mathematical projects. One kind of broad problem that interested Arrow was how groups of individuals make collective decisions, a problem found throughout public life—from going out to dinner with a group of friends to political elections. Arrow transformed this commonplace process into a problem about aggregating individual preferences into a single preference for a group. He called this aggregation the “social welfare function.”

Perhaps Arrow’s most famous idea was his widely-cited Impossibility Theorem. The Impossibility Theorem states that any properly expressed social welfare function will, in fact, be “dictatorial,” which means that the preferences of the group are reflected by the preference of a single member, whether or not he is aware of this pivotal role. This result calls the very legitimacy of democratic institutions into question. Not only do our institutions often fail us but, according to the Impossibility Theorem, they always will. Furthermore, contrary to the paradigm of Francis Galton’s Wisdom of the Crowd, which suggests that we ought to prioritize the opinion of a group rather than that of one individual or technocrat, democratic decision-making does not necessarily reflect morality or truth. Rather, voting is a utilitarian process of making group decisions, many of which might be more arbitrary than is often thought. By this line of reasoning, perhaps voting is little more than a necessary evil.

Duke University economist Michael Munger shares this view:

“Democracy is a process, an indispensable process, for making decisions and controlling the excesses of state officials. But, as Kenneth Arrow showed, elections and voting are not, and in fact cannot be, a process for discovering anything true or moral about the world. Values have to be reasoned, not fashioned with a majority rule bludgeon.”

Perhaps in this new era of politics, where the arbitrary and the confused abound, Arrow and his wisdom are needed more than ever. Too bad he won’t be here to share it in person.

Hans Riess writes for Merion West. 

Hans Riess graduated from Duke University with a degree in mathematics and is working towards a PhD in electrical engineering at the University of Pennsylvania. He is interested in applying concepts from mathematics to theories of optimal political decision-making.

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